Intel to Buy ST-Ericsson’s GPS Chip Business

Intel is set to buy ST-Ericsson’s Global Navigation Satellite System (GNSS) which includes personal receivers that interact with GPS technology and GLONASS–a radio-based satellite navigation system operated by the Russian Aerospace Defence Forces.

ST-Ericsson is a joint venture between STMicroelectronics and Ericsson was formed in 2008 between Swedish telecom equipment maker Ericsson and French-Italian semiconductor firm STMicroelectronics, making the combined venture the second-largest mobile chipmaker after Qualcomm.

The deal is the latest step in the dissolution of ST-Ericsson which has been losing money for the past five years or so.

The company, which at one time employed as many as 5,000, essentially agreed late last year to disband, and the two parent companies in March agreed to how the company would be broken up. Ericsson will take over LTE-related aspects and STMicroelectronics will assume existing products and business from the joint venture.

Neither company revealed the price, the company said the deal will end up saving the company US$90 million. The deal is also expected to be completed in August this year.

It is expected that the GNSS engineering team and its leadership, which has a combined total of about 130 employees will be integrated into Intel’s Mobile and Communications Group’s Wireless Platform R&D (WPRD) division. The rest of the 1,600 employees will face the axe when the deal closes sometime in August.